European Commission President Ursula von der Leyen has announced a funding package of up to €200 million to strengthen transport, energy and digital connectivity across the South Caucasus.
She made the announcement in Baku, the Azerbaijani capital, during a meeting with President Ilham Aliyev on July 1.
The grant funding would be drawn from the European Union’s Global Gateway strategy, which channels money into infrastructure and connectivity in partner countries.
Von der Leyen said the sum had the potential to mobilise up to €2 billion in public and private investment across the region.
“Together, we can turn peace on paper into peace in practice,” she said of the initiative, named the Peace through Connectivity Package.
The Commission said the funds could support projects such as a rail connection through Nakhchivan, an Azerbaijani exclave, and the development of the Port of Baku.
Von der Leyen was accompanied by Enlargement Commissioner Marta Kos. The two met Aliyev to discuss regional cooperation and bilateral trade and energy ties.
A further €20 million would be directed to a peace-fostering programme for communities in Armenia and Azerbaijan, the Commission said.
That money would fund healthcare, demining, skills development and support for small businesses in border areas, according to the EU executive.
Von der Leyen and Aliyev also announced a ministerial conference on regional connectivity investment, which would be held in Baku by the end of 2026.
The gathering would bring together the EU, South Caucasus and Central Asian states, international financial institutions and private investors, the Commission said.
The package follows a peace agreement between Armenia and Azerbaijan that ended nearly four decades of conflict over Nagorno-Karabakh.
The mountainous enclave has an ethnic Armenian majority but is recognised internationally as part of Azerbaijan.
The two countries signed a declaration in Washington in 2025, with United States President Donald Trump acting as a witness, according to Reuters.
Aliyev said his talks with von der Leyen had centred on regional security and the normalisation of relations with Armenia, which he described as progressing.
Von der Leyen was due to travel to Armenia on July 2 for talks with Prime Minister Nikol Pashinyan.
